Herb Jackson

USA Today

December 26, 2017

WASHINGTON — New Jersey is likely to get what it’s been seeking for years when the U.S. Supreme court rules in the next few months on the state’s fight to allow sports betting at casinos and racetracks, law professors and attorneys for gambling companies agree.

But there is a wide range of opinion on whether the court would open the door to sports books in a dozen other states as well, and many people are watching the case for the way it could shape future legal arguments on issues as varied as gun control, immigration and marijuana.

New Jersey is fighting to overturn the Professional and Amateur Sports Protection Act, or PASPA, a 1992 law that said any state that did not legalize sports betting by 1993 was prohibited from doing it. Despite heavy lobbying from Atlantic City, including an aggressive push from then-casino owner Donald Trump, a bill to put a sports betting referendum on the ballot in 1993 failed in the state Assembly.

New Jersey did not pass a law legalizing sports betting until 2012, and that law was overturned by federal district and appeals courts. Seizing on arguments made by opponents in court in that fight, New Jersey passed a new law in 2014 that did not legalize sports betting outright, but it did remove the prohibition against it at tracks and casinos.

That law was also rejected by district and appeals courts, but on Dec. 4 the Supreme Court heard arguments on the case and most observers said there appeared to be sympathy for the state’s position among a majority of the justices.

At its heart, New Jersey’s case is about the 10th Amendment to the Constitution, which says the power of Congress is limited to specific enumerated powers and anything not on that list — which does not mention gambling — is the exclusive domain of the states.

Federal power expanded broadly in the 20th Century as courts upheld federal laws based on the argument that Congress was using its power to regulate interstate commerce. But with sports betting, Congress did not actually set up a regulatory system for sports betting, it just told states where it was not already legal that they could not allow it.

New Jersey is arguing that that approach amounts to Congress unconstitutionally “commandeering” the state Legislature by telling it which laws it can and cannot pass.

“Congress can regulate interstate commerce but they can’t make states do the work of Congress,” Theodore Olson, New Jersey’s attorney in the case, said after court arguments. “Congress can’t say to the states, you should regulate this, you should do this, you should pass laws in these areas.”

That line of argument got a good reception from some of the court’s conservatives, as well as one of the more liberal justices, Stephen Breyer.

If the court rules that way, it could affect other issues, such as the effort by states to legalize marijuana despite federal laws that prohibit it.

“At the end of the day, I earnestly believe the Supreme Court decision will have a greater impact in determining what behavior by the federal government constitutes commandeering than it will have on the ultimate legality of sports betting,” said Marc Edelman, a law professor at Baruch College’s Vicklin School of Business.

“One that stands out most to me entails whether the federal government under Trumpism would be allowed to compel state governments to take affirmative action against Dreamers or other illegal immigrants,” Edelman said.

Daniel Wallach, a sports law attorney in Fort Lauderdale, Fla., said the court may have to taken the case because of concerns about the ruling by the 3rd Circuit Court of Appeals that overturned New Jersey’s sports betting law.

Wallach said the circuit court ruling said Congress had broad powers to block states from modifying their own laws regarding private conduct.

“Whether it’s sports betting, gun ownership, the use of medical marijuana, there’s myriad examples where that could come into play,” Wallach said.

The court could decide that PASPA is a permissible preemption of state power, and that would leave Nevada as the only state where people can place wagers on individual sports. Delaware, Montana and Oregon could maintain limited sports lotteries.

The court could also strike the law down entirely, opening the way for many other states to start taking sports bets as well. But if the court wanted to uphold the law, it may not have taken the case. And few observers believe the court will completely throw out a 25-year-old statute because justices try to be more deferential to Congress.

But there are several ways the court could open the door to North Jersey residents being able to drive to the Meadowlands racetrack next year to bet on the Giants or Jets.

One way would be to say that PASPA is constitutional, but New Jersey’s statute did not violate it because the state did not set up a regulatory framework for running sports books.

“New Jersey could then open up, and any other state that wanted to do things that way could open up too,” said A. Jeff Ifrah, a Washington, D.C. attorney and member of the editorial board of the publication Online Gambling Lawyer.

Ifrah said 10 to 12 states have drafted bills to set up sports betting in anticipation of a court ruling, but all of them were looking at creating a system of regulated games, rather than following New Jersey’s hands-off approach.

If that happened, New Jersey’s sports books would not have a lot of competition, at least until other states decide to follow the same route.

The court could also decide that the groups that sued to prevent New Jersey from allowing sports betting, four professional sports leagues and the National Collegiate Athletic Association, do not have standing to bring the case.

PASPA authorized the leagues to sue to protect their games, but Ifrah said the court could find that Congress improperly designated them to enforce the law.

“New Jersey could open up and then see if the United States brought an injunction in its own name,” Ifrah said. The Justice Department argued against the state law before the high court, but it did not initiate the case.

Another possibility, said Nevada gaming attorney Kate Lowenhar-Fisher, is that the court could strike down parts of PASPA and not the whole thing, such as the part that treats some states differently from others.

“On behalf of the state of Nevada, I love that we’re treated differently from everybody else, but that’s probably not fair in terms of equal sovereignty,” Lowenhar-Fisher said. “I was very surprised there were no questions from the court on the equal sovereignty issue.”

Edelman said that if the court does open the door to widespread sports betting, Congress could write a new law barring it that does not violate the ruling. Conversely, if the court turns New Jersey down, Congress could respond by repealing PASPA.